Don’t Let Mismatched Socks Get in the Way of Understanding Data and Today’s Car Buyer

I had the pleasure of attending the Digital Summit 2015 at Google’s headquarters this spring. The event was sponsored by Haystak and it provided managers from 100 dealerships the chance to visit the Googleplex and participate in a full day of activities. We heard from three Google presenters representing product and sales, Sandy Schwartz, President of Cox Automotive, Jared Rowe, President of AutoTrader, Jon Wolske Evangelist for Zappos Shoes (his actual job title), Duncan Scarry, Founder of Haystak Digital Marketing and Christian Rudder, Co-Founder and President of OKCupid.

The most unconventional but informative presentation came from Christian Rudder. Rudder graduated with a degree in Mathematics from Harvard. Rudder is the author of Dataclysm and the Co-Founder of a successful online dating site. I was a bit skeptical when Rudder took center stage as a presenter. He was wearing a wrinkled t-shirt, mismatched socks (one pink and the other yellow), his hair didn’t look like it had been combed for the past couple days and he was running a dating service. Once Rudder started to focus on his topic, he found his zone and had great insight for the audience. Rudder started by stating that some people suggest that big data is a mysterious and complicated process. I have personally attended sessions at digital dealer events where that specific message has been communicated, so Rudder had my attention. Rudder showed a slide with a series of columns and rows of numbers. Rudder explained in two minutes that big data is simply a series of numbers that represent specific pieces of information. For example, with OKCupid, candidates interested in dating complete a survey on their favorite books, music and movies, what they enjoy doing for fun, etc… Big data is simply attaching a numerical value for each response. If the person enjoyed rock music, that response may be a #2 on that row of numbers. Listening to country music may be a #8 for a different candidate. If they enjoy sailing, that response may be a #8 on a different row. Now imagine a million rows with multiple columns of numbers and you get a good visual of how big data works.

Rudder went on to explain how big data can be misunderstood. When his team started OKCupid one question was tied to the perfect age that the candidates would look for when dating. The responses to this age question from the women was fairly predictable. Women at the age of 22 were interested in dating men that were 24. Those that were 30 were interested in dating a man that was 30 and those that were 49 were interested in finding a man to date that was 45 years old. The responses from the men were not quite as predictable. The 21 year old men were, typically interested in dating women that were 20. The 30 year old men also wanted to date a 20 year old woman and the 49 year old men wanted to date 21 year old women. The 50 year old guys did jump to the age of 22. This overview created the best laugh of the day but what were the applications and conclusions except that men are not realistic?

I personally considered how dealerships base their entire ad budget on a limited amount of information, primarily their Google Analytics report. I am not suggesting that this analysis isn’t important but it only tells a portion of the story. As an example, if you are running pre-roll ads through DoubleClick, you should be using a Floodlight tag for tracking post view conversion or the number of people that hit your website over the next 30-60 days. You should also track the impact with showroom traffic, phone ups and model sales tied to specific campaigns.

Here are some other key points that I picked up from the Google and Cox team. The average new car sales cycle has been consolidated to 3.1 months. This means that the typical new car purchaser will spend 95 days conducting research, consuming video content, calling dealers, researching third party sites to select and purchase a specific car, SUV or truck. During this period, the typical new car buyer will invest 12.5 hours online and 4 hours and 12 minutes offline. This typical new car buyer will be influenced by 24 research touch points during this 95 day cycle (the majority of the research touch points are digital). At the starting point of this process,72% of the new car purchasers are open to brand consideration! This means that brand loyalty is very limited. This is an incredible opportunity and a potential loss to any dealer depending on their approach to the automotive shopper. At the end of the research phase, 70% of the new car purchasers buy the specific model.

As a general manager, I was taught to believe that the manufacturer was responsible for branding the models and my focus was to brand the store with the prospects that gained interest in my brand. The lines between Tier 1,2 and 3 had specific responsibilities based on where the customer was in the sales funnel process. If Google is correct, dealers this linear approach is obsolete. If Google is correct, and you are only focused on selling your dealership, you are missing opportunities on the new car side. If 72% of the shoppers are open to brand consideration at the beginning of the process and 70% lock on a model after the research phase, the customer is ahead of your ad message. Dealers should be aggressively involved with brand conquesting initiatives. From a Tier 2 perspective, some manufactures are responding to this new model by permitting Tier 2 dollars to be directed to digital initiatives that go beyond TV. As dealers start selling more aggressively to the Millennials, the ad model will continue to take a different shape. I would encourage dealers to go beyond their agency for ideas to reach the automotive intender.